HomeTopicsFinanceGetting the spark to leap the gap

Getting the spark to leap the gap

Crowdfunding platforms are a facility where financing projects and investors meet with good returns.

Crowd Funding Gelbe Glühbirne Kopie.jpgBut even on the internet, regional barriers can represent a hurdle. A research project has dedicated itself to the aim of doing away with these.

The hightech warning signals from Vorarlberg spark across regional boundaries – Senitec Seniturn has made the grade. The young entrepreneurs succeeded in obtaining 197 percent finance for their business idea. They didn’t take it to a bank either, but presented themselves by way of an online platform, coming up with 105 investors. As an alternative financing option, crowdfunding and crowdinvesting are becoming more important all the time. Nowadays investors are desperate for projects that will bring returns. They are increasingly inclined to support ideas they believe in directly. They lend projects money or acquire shares, or sometimes they simply make a donation. One positive example is the Ideenkanal-Initiative [Ideas Channel Initiative] from Liechtenstein, which promotes successful ideas for the region, in the region, by way of an internet portal.

But the shower of gold has its limits – both at national, and even at regional level. The Assistant Professor at the Chair of Finance, Martin Angerer, says: ‘Cross-border projects are on average less successful than those where investors and the project come from the same geographical area.’ Experts explain this on the basis of ‘home bias’. People like investing in areas which feel more familiar. Projects which are aimed at a transregional or international target group have a more difficult hand to play. But in a small and inventive country like Liechtenstein, start-up businesses are often looking for financial support on a cross-border basis. So how can these projects hope to succeed?

This is the point of departure for a new interdisciplinary research project which was officially launched in April 2015. It forms part of the university’s new research focus under the heading of ‘Cross-Border Living and Working’, and is aimed at discovering how regional projects can be got off the ground with the help of crowdfinancing platforms. Along with Assistant Professor of Finance Martin Angerer, Professor Sascha Kraus of the Institute of Entrepreneurship and Dirk Zetzsche, Professor of Banking and Finance Law, are likewise involved. They are assuming that investors may be inclined to think cross-border projects represent an excessive degree of risk. ‘Many legal questions, like those involving tax, have not yet been adequately clarified – the financing sector is quite simply too young,’ says Professor Angerer. So it needs to be considered what kind of framework in the country can give foreign investors the security they need.

But first of all the researchers want to know just what it is that makes a project successful. The few studies there have been on this subject to date suggest that there are better chances of support if a business idea can be explained in the form of a video, or if the prime mover is particularly well endowed with Facebook friends. At the moment the team are setting up a virtual platform with ideas which test investors can choose from. Information on this, as well as relating to the Crowdfunding Conference to be held on 9 November, may be found at  www.uni.li/crowdfunding. So before long anyone will be able to make a contribution, with a view to helping regional projects take to the air.


by Yvonne von Hunnius